Yamana Gold provides development and near development stage projects update



    TORONTO, June 17 /CNW/ - YAMANA GOLD INC. (TSX: YRI; NYSE:   AUY; LSE: YAU)
today announced further advancements in its development and near development
stage projects, supporting the Company's continued focus on advancing its
higher-return, highly prospective development stage projects.

    Mercedes, Mexico

    The Mercedes project is located in northern Sonora, Mexico approximately
200 kilometres south of Tucson, Arizona.  The deposit consists of a complex
gold-silver hydrothermal low-sulphidation vein/stockwork system.

    A positive pre-feasibility study for Mercedes was previously provided in
February 2009. The following is a summary of the results of the study:

    
    Reserves (Proven and Probable): 2.65 mt grading 7.58 g/t AuEq containing
    645,490 GEO
    Resources (Measured and Indicated): 2.39 mt grading 9.19 g/t AuEq
    containing 705,000 GEO
    Construction Capital Cost: US$152M
    Cash Cost (per GEO): US$264
    Production (per year): 118,000 GEO
    Initial Mine Life: 6 years
    IRR: 22.4%
    

    The financial analysis as provided in February 2009 was based on a gold
price of US$814 per ounce and a silver price of US$13 per ounce and a 5%
discount rate resulting in an initial value of US$73 million. The Company's
further analysis under the same assumptions although with cash flow based on
US$950 per ounce of gold and US$15 per ounce of silver results in a value of
US$120 million. This does not take into account the benefit of discovery of
any additional ounces or extension of the mine life beyond the period in the
study.

    The Company indicated on delivery of the study that while the project had
sufficient return and value, supporting a development decision, further
drilling would be undertaken to ensure the continuity of grade and increase
the total mineable ounces, thereby increasing mine life above the initial
level in the study.

    The study was based on drilling and other information up to the end of
the third quarter of 2008.

    Yamana continues to advance the project in 2009. Yamana is targeting
30,000 metres of drilling in 2009, with a budget of approximately US$4.0
million and the principal goal of extending the mine life.

    To date this year, drilling at Mercedes has been focused primarily on the
northwest extension of the Mercedes and the Lupita vein targets, with a total
of 16,450 metres of core in 43 holes having been completed (see attached map).

    In addition, in 2009, Yamana also completed construction of an
underground ramp into the Mercedes vein to upgrade reserves to the proven
category and also to confirm metallurgy, geotechnical and geological
parameters. The underground ramp will accelerate construction and development
of Mercedes once a construction decision is made in expected to be in the
first quarter of 2010. To date, the tunnel has over 800 metres of development
and two vein cross-cuts have been completed at the levels 1,100 and 1,080
metres, confirming both vein width and grades.

    
    Las Barrancas
    -------------
    
    Recent drilling on the Mercedes northwest extension area has identified a
major fault zone containing epithermal quartz-carbonate veins, which is
covered by post-mineral volcano-sedimentary rocks. Fourteen widely spaced core
holes have tested the Las Barrancas zone along a strike length of 1,800
metres. The zone begins approximately 250 metres northwest of the Mercedes
grade shell on an apparent sub-parallel structural trend. Within the trend,
Au-Ag bearing stockwork zones up to 25 metres wide have been identified,
containing fissure veins to 9.0 metres in width. The zone has been tested by
very wide-spaced holes and is open at depth. The veins display many of the
same stages of quartz-carbonates and epithermal characteristics as the
Mercedes vein. The results from this drilling are not included in the resource
estimate from the February 2009 pre-feasibility study and are expected to
increase that resource estimate.

    The best intersection year-to-date (using a 2.0 g/t AuEq cutoff) is
M09-449 intersecting 7.70 metres of 17.48 g/t Au and 66.0 g/t Ag and other
results include:

    
    -------------------------------------------------------------------------
                                            Intercept
    Hole Number   From (m)      To (m)      Width (m)    Au (g/t)    Ag (g/t)
    -------------------------------------------------------------------------
    M09-423D       170.69       173.74         3.05        26.03        22.2
    -------------------------------------------------------------------------
    M09-427D        198.9       199.95         1.05         6.15        31.0
    -------------------------------------------------------------------------
    M09-428D       294.38       297.18         2.80         2.18        11.5
    -------------------------------------------------------------------------
    M09-439D       257.85       266.15         8.30         3.65        59.0
    -------------------------------------------------------------------------
    M09-440D       182.27       182.70         0.43         8.48        40.0
    -------------------------------------------------------------------------
    M09-441D       194.46       194.70         0.24        13.25       143.0
    -------------------------------------------------------------------------
    M09-442D       167.85       168.17         0.32         7.82        34.0
    -------------------------------------------------------------------------
    M09-449D       203.60       211.30         7.70        17.48        66.0
    -------------------------------------------------------------------------
    

    The intersection in Hole 449 was two kilometres to the northwest of the
area of known mineralization and is on the Corona do Oro vein, and supports
the view that a substantial increase in the overall resource at Mercedes is
possible.

    Results were also returned from three geotechnical holes that were
drilled in 2008 within the main Mercedes area, but not assayed until this
year, and have not yet been incorporated into the resource estimate. The three
holes show excellent correlation to modeled grades and widths from nearby
drill holes, with the following results (using a 2.0 g/t AuEq cutoff):

    
    -------------------------------------------------------------------------
      Hole                                       Intercept
     Number     Ore Shoot      From (m)  To (m)  Width (m) Au (g/t)  Ag (g/t)
    -------------------------------------------------------------------------
    M08-377D  Tierra de Nadie   202.66   212.45      9.79    36.33     261.6
    -------------------------------------------------------------------------
    M08-379D   Corona de Oro    226.48   237.74     11.26    24.38     722.0
    -------------------------------------------------------------------------
    M08-383D   Breccia Hill     155.45   156.53      1.08     7.84     280.0
    -------------------------------------------------------------------------
    

    These drill results at Las Barrancas are encouraging as the footprint of
known zone of veining, hydrothermal alteration and Au-Ag mineralization has
been extended on strike under post-mineral cover rocks by over 1,800 metres.

    
    Lupita
    ------
    
    Drilling has focused on testing the down-dip continuity along a 600-metre
strike length of the Lupita vein zone, located at the contact between the
upper host andesite and lower lithic tuff. All holes intersected the
vein/stockwork zone, which ranges from 3.0 to 70 metres in width.

    Five widely-spaced holes successfully intersected Au-Ag mineralization up
to 150-metres down dip from initial reverse circulation holes drilled in 2006.
The zone is open along strike and at depth.

    The best intersections year-to-date (using a 2.0 g/t AuEq cutoff) include
L09-021D intersecting 7.64 metres of 28.15 g/t Au and 52 g/t Ag:

    
    -------------------------------------------------------------------------
                                           Intercept
    Hole Number   From (m)       To (m)    Width (m)     Au (g/t)    Ag (g/t)
    -------------------------------------------------------------------------
    L09-017D       176.48       178.18         1.70         6.01        52.0
    -------------------------------------------------------------------------
    L09-018D       192.46       194.84         2.38         3.47        31.0
    -------------------------------------------------------------------------
    L09-019D       140.60       141.15         0.55        10.55       115.0
    -------------------------------------------------------------------------
    L09-020D       217.65       219.15         1.50         3.97        10.0
    L09-020D  and  222.20       223.54         1.34         2.64        32.7
    -------------------------------------------------------------------------
    L09-021D       193.51       201.15         7.64        28.15        52.0
    -------------------------------------------------------------------------
    

    Drilling at Lupita has shown the vein system to be substantially more
robust than indicated in surface exposures and at higher grades.

    Additional drilling at both Las Barrancas and Lupita is planned to define
potential high grade ore shoots. Mercedes continues to show a high geological
potential given the size of the property and the results of geological and
geophysical studies to date, which support a feasibility study and
construction decision for Mercedes expected by the first quarter of 2010. The
Company presently anticipates the completion of construction and commencement
of commissioning within 24 to 30 months.

    Pilar, Brazil

    In April 2009, Yamana delivered an update to Pilar's resource estimate of
12.6 million tonnes grading 3.61 g/t gold containing 1.46 million gold ounces,
which demonstrated a substantial increase in inferred resource of 51% and a
grade increase of 48% year-over-year. The increase in resource is entirely
from the high-grade Jordino deposit which is the largest and most prospective,
and now represents approximately 85% of total contained gold ounces.

    Pilar is located east of the Crixas Greenstone Belt which hosts the Serra
Grande gold mine and the Guarinos Greenstone Belt which is east of the Crixas
Belt and similar in shape and size. The Crixas and Pilar gold mineralization
have very similar structural control, hydrothermal alteration, stratigraphy
and tectonic history, and are approximately 40 kilometres apart. Yamana
controls approximately 65,000 hectares of mineral claims and permits that
cover the majority of the Guarinos and Pilar Greenstone belts.

    Yamana has budgeted US$4.1 million for exploration in 2009 for the Pilar
project. Approximately 20,000 metres of diamond drilling are planned, of which
approximately 12,000 metres will be focused on growing the resource along
strike and down dip. Infill drilling and tunneling, primarily at Jordino, is
also planned to further define the current inferred resource to upgrade the
resource category. The Company's view is that an initial mineable resource
level of one million ounces would support a development decision.

    Drilling to date this year has focused on extending the main Jordino
mineralization down dip and the Company continues to report positive results
(see map attached). Drill hole 117 extended mineralization significantly along
strike by 1,000 metres and under cover rocks of the Araxa Group. The best
drill intercepts to date are:

    
    -------------------------------------------------------------------------
                                                    Intercept
    Hole ID         From (m)          To (m)        Width (m)        Au (g/t)
    -------------------------------------------------------------------------
                      307              309                2             3.02
    JD_125    ---------------------------------------------------------------
                      372              373              0.8             6.56
    -------------------------------------------------------------------------
    JD_126            272              274              2.1             7.97
    -------------------------------------------------------------------------
                      300              301                1                8
              ---------------------------------------------------------------
                      317              318                1              3.1
    JD_129    ---------------------------------------------------------------
                      345              347                2             8.58
              ---------------------------------------------------------------
                      345              346                1            16.36
    -------------------------------------------------------------------------
                      293              300                7            13.28
    JD_111    ---------------------------------------------------------------
                      293              295                2            45.91
    -------------------------------------------------------------------------
                      472              474                2             4.76
              ---------------------------------------------------------------
    JD_117            472              473                1             9.44
              ---------------------------------------------------------------
                      493              494                1             4.71
    -------------------------------------------------------------------------
    JD_119             63               66                3             4.23
    -------------------------------------------------------------------------
                      167              169                2             4.12
              ---------------------------------------------------------------
                      174              177                3             3.78
              ---------------------------------------------------------------
    JD_113            182              184                2             3.77
              ---------------------------------------------------------------
                      188              191                3             3.15
              ---------------------------------------------------------------
                      190              191                1              8.1
    -------------------------------------------------------------------------
                      320              321                1             8.66
    JD_103    ---------------------------------------------------------------
                      328              329              1.3             2.72
    -------------------------------------------------------------------------
    JD_122            435              436                1             5.88
    -------------------------------------------------------------------------
    

    The Pilar project is rapidly developing into a defined resource for
feasibility. Yamana believes Pilar is highly prospective and is an important
near development stage project for the Company with the potential to be
accelerated. A feasibility study and construction decision is expected in the
first quarter of 2010.

    Minera Florida, Chile

    Minera Florida has been a very successful operating mine for more than 20
years with exploration at and around the mine still in early stages and
prospective targets that remain underexplored. Exploration efforts have
focused on the delineation of the newly discovered Centenario deposit and the
Polvorin deposit (see map attached). Both have been traced along strike
lengths of approximately 400 metres and are open to depth and along strike.
The best intersections are:

    
    Centenario
    ----------

    -------------------------------------------------------------------------
    Hole Number  Depth (m)    Width (m)      Au(g/t)      Ag(g/t)      Zn (%)
    -------------------------------------------------------------------------
    669             126.9          9.3         9.53           13        0.67
    -------------------------------------------------------------------------
    670              40.8         2.33        15.91           12        0.35
    -------------------------------------------------------------------------
    675              82.2         6.63          9.8           15        0.84
    -------------------------------------------------------------------------
    677              71.4         5.73         5.07           13        1.06
    -------------------------------------------------------------------------

    Polvorin
    --------

    -------------------------------------------------------------------------
    Hole Number  Depth (m)    Width (m)      Au(g/t)      Ag(g/t)      Zn (%)
    -------------------------------------------------------------------------
    672             198.2          1.3         7.95            8        2.76
    -------------------------------------------------------------------------
    674             201.5         2.25         11.6           49        1.94
    -------------------------------------------------------------------------
    676            189.27         1.63         9.08           12        1.59
    -------------------------------------------------------------------------
    678             199.9         2.69          5.9           12         2.5
    -------------------------------------------------------------------------
    681             199.2         3.64          7.5           17         0.7
    -------------------------------------------------------------------------
    

    Both Centenario and Polvorin contain higher grades than the current mine
grades. Drilling will continue through the third quarter and a resource
estimate for these new targets is expected to be completed in the fourth
quarter of this year.

    Quality Assurance and Quality Control

    While each of Mercedes and Pilar as stand-alone projects may not be
considered material to the Company, the analyses and studies conducted for
these projects had quality control measures and quality assurances consistent
with technical and similar reports and information for the Company's material
properties.

    Qualified Person

    William H. Wulftange, P.Geo., Director, Technical Compliance for Yamana
Gold Inc. has reviewed and confirmed the data contained within this Press
Release relating to Pilar and Minera Florida and serves as the Qualified
Person as defined in National Instrument 43-101.

    Mark Hawksworth, P. Geo., Senior Geologist for Yamana Gold Inc. has
reviewed and confirmed the data contained within this press release relating
to Mercedes and serves as the Qualified Person as defined in National
Instrument 43-101.

    UPCOMING EVENTS ON DEVELOPMENT STAGE PROJECTS

    
    -   Update to 2007 C1 Santa Luz economic analysis: Q3 2009
    -   C1 Santa Luz construction decision: H2 2009
    -   Update to QDD Lower West: by end of year 2009
    -   Ernesto/Pau-a-Pique feasibility study and construction decision: by
        end of 2009
    -   Mercedes feasibility study and construction decision: Q1 2010
    -   Pilar feasibility study and construction decision: Q1 2010
    

    About Yamana

    Yamana is a Canadian-based gold producer with significant gold
production, gold development stage properties, exploration properties, and
land positions in Brazil, Argentina, Chile, Mexico and Central America. The
Company plans to continue to build on this base through existing operating
mine expansions and throughput increases, the advancement of its exploration
properties and by targeting other gold consolidation opportunities in the
Americas.

    CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This news release
contains or incorporates by reference "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of 1995
and applicable Canadian securities legislation. Except for statements of
historical fact relating to the Company, information contained herein
constitutes forward-looking statements, including any information as to the
Company's strategy, plans or future financial or operating performance.
Forward-looking statements are characterized by words such as "plan,"
"expect", "budget", "target", "project", "intend," "believe", "anticipate",
"estimate" and other similar words, or statements that certain events or
conditions "may" or "will" occur. Forward-looking statements are based on the
opinions, assumptions and estimates of management considered reasonable at the
date the statements are made, and are inherently subject to a variety of risks
and uncertainties and other known and unknown factors that could cause actual
events or results to differ materially from those projected in the
forward-looking statements. These factors include the impact of general
business and economic conditions, global liquidity and credit availability on
the timing of cash flows and the values of assets and liabilities based on
projected future conditions, fluctuating metal prices (such as gold, copper,
silver and zinc), currency exchange rates (such as the Brazilian Real and the
Chilean Peso versus the United States Dollar), possible variations in ore
grade or recovery rates, changes in the Company's hedging program, changes in
accounting policies, changes in the Company's corporate resources, changes in
project parameters as plans continue to be refined, changes in project
development, production and commissioning time frames, risk related to joint
venture operations, the possibility of project cost overruns or unanticipated
costs and expenses, higher prices for fuel, steel, power, labour and other
consumables contributing to higher costs and general risks of the mining
industry, failure of plant, equipment or processes to operate as anticipated,
unexpected changes in mine life, final pricing for concentrate sales,
unanticipated results of future studies, seasonality and unanticipated weather
changes, costs and timing of the development of new deposits, success of
exploration activities, permitting time lines, government regulation of mining
operations, environmental risks, unanticipated reclamation expenses, title
disputes or claims, limitations on insurance coverage and timing and possible
outcome of pending litigation and labour disputes, as well as those risk
factors discussed or referred to in the Company's annual Management's
Discussion and Analysis and Annual Information Form for the year ended
December 31, 2008 filed with the securities regulatory authorities in all
provinces of Canada and available at www.sedar.com, and the Company's Annual
Report on Form 40-F filed with the United States Securities and Exchange
Commission. Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other factors that
cause actions, events or results not to be anticipated, estimated or intended.
There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such statements. The Company undertakes no obligation to
update forward-looking statements if circumstances or management's estimates,
assumptions or opinions should change, except as required by applicable law.
The reader is cautioned not to place undue reliance on forward-looking
statements. The forward-looking information contained herein is presented for
the purpose of assisting investors in understanding the Company's further
advancements in its development and near development stage projects as well as
the Company's plans and objectives and may not be appropriate for other
purposes.

    
    CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED,
    INDICATED AND INFERRED MINERAL RE

SOURCES This news release uses the terms "Measured", "Indicated" and "Inferred" Mineral Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. To see maps attached to this press release, please go to: http://files.newswire.ca/797/Yamana-Maps.doc

For further information:

For further information: MEDIA INQUIRIES: Mansfield Communications Inc.,
Hugh Mansfield, (416) 599-0024; Yamana Gold Inc., Jodi Peake, Vice President,
Corporate Communications & Investor Relations, (416) 815-0220, Email:
investor@yamana.com; Letitia Wong, Director, Investor Relations, (416)
815-0220, Email: investor@yamana.com, www.yamana.com

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